WASHINGTON, D.C. — In March 26 testimony before Congress, John Weber, president-elect of the National Pork Producers Council (NPPC), told the House Agriculture Subcommittee on Livestock and Foreign Agriculture that the United States must address its mandatory country-of-origin labeling (COOL) law to avoid trade retaliation from Canada and Mexico.
"The U.S. pork industry cannot afford to have these exports disrupted, nor can workers in allied sectors," said Weber, a Dysart, Iowa, pork producer. "The U.S. pork industry supports an estimated 550,000 domestic jobs, most in rural areas, and about 110,000 of these are the result of pork exports."
According to him, Mexico and Canada are the second and third largest foreign markets for U.S. pork, with exports totaling $1.55 billion and $904 million, respectively.
"U.S. exports to Canada since the implementation of the U.S.-Canada Free Trade Agreement in 1989 have grown by over 20 times, while pork exports to Mexico since NAFTA in 1994 have grown by over 12 times," he said. "The loss of the Mexican and Canadian markets, valued at $2.4 billion, could cost over 16,000 non-farm jobs."
In 2002, Congress initially adopted a COOL labeling requirement for meat products despite serious concerns it wouldn’t comply with trade commitments. The law was amended in 2008 and immediately challenged in the World Trade Organization (WTO) by Canada and Mexico.
At a March 25 hearing, Rep. David Rouzer (R-N.C.), who chairs the Livestock and Foreign Agriculture subcommittee, said the WTO has since ruled three times in those countries’ favor "and members and witnesses at today’s hearing stressed the significance of the U.S. potentially losing its fourth and final appeal."
"We could be looking at substantial retaliatory sanctions against agriculture and a variety of other industries," he said. "As we heard from our panel of witnesses, the threat of retaliation is severe, and Congress must act quickly to prevent irreparable damage to certain industries and the overall economy."
Last fall, the WTO ruled the U.S. meat labeling law violated U.S. international trade obligations by discriminating against Canadian and Mexican livestock. But the United States has since appealed the decision.
"After hearing from members of the agriculture and business communities, it is more apparent than ever that this committee must not only fully understand the potential consequences following the WTO decision, but be ready with a legislative solution. I remain committed to working with my colleagues in the House and Senate to avoid retaliation," said Rouzer.
Canada has published a list of more than three dozen categories of products that could be hit. While Mexico hasn’t yet made public its list, Weber said U.S. experience with retaliation by Mexico, resulting from its successful challenge to the U.S. ban on Mexican trucking, suggests its list will be at least as long and likely quite similar to the trucking retaliation list.
"That retaliation totaled $2.4 billion," he said. "It has been rumored that Mexican importers are already looking for alternative sources of supply for products on the list. There is no way the United States can compete with products from other countries when U.S. products are subject to steep retaliatory duties.
"Regrettably for the U.S. pork industry, pork is on Canada’s target list and will likely be on Mexico’s. Because COOL involves agricultural products, retaliation is inevitably going to fall heavily on U.S. agriculture."
Rep. K. Michael Conaway (R-Texas), who chairs the Agriculture Committee, said, "Meat industries knew from the start that this policy would not hold up in the WTO, but Congress didn’t listen, and we have seen major costs with no benefits. COOL has been a failed experiment from the start, and now the economic damages we could face will be felt by all Americans, not just the agriculture industry."
Linda Dempsey, vice president of international economic affairs for the National Assoc. of Manufacturers, who co-chairs the COOL Reform Coalition along with the U.S. Chamber of Commerce, told Congress, "With the threat of retaliation looming for our nation’s manufacturers, we and the COOL Reform Coalition urge that Congress move quickly to eliminate these WTO-inconsistent provisions."
The WTO is expected to rule on the COOL law by May 18.
